Broadband Britain catches up with the world - a bit

By Steve Malone

Posted on 9 Dec 2002 at 11:53

Britain still lags behind a number of major industrialised countries in the take up of broadband although growth is way ahead according to a report published by Oftel.

The report International benchmarking study of Internet access (dial-up and broadband), is a comparative study of the UK against Germany, France Sweden and the US. It concludes that as of June 2002, only 1.26 per cent of the total UK population were signed up to broadband compared to 6.8 per cent in Sweden, 5.84 per cent in the US, 3.15 per cent in Germany and 1.64 per cent in France.

However, Oftel points out that growth in the UK far outstrips those of the other countries. Broadband growth in the UK was 47 per cent for the quarter March-June although there is still a lot of catching up to do.

The figures show that the UK suffered from the slow roll-out of DSL prior to 2002. For example in 2001 60 per cent of the UK lines were DSL enabled compared with 70 per cent for Sweden, 76 per cent for France and 80 per cent for Germany. Britain has now caught up slightly to 66 per cent although 90 per cent of lines in Germany are now covered by DSL. The slow roll-out of DSL has also meant that over half of the UK's broadband subscribers do so via cable modems.

The extent of cable modem take-up makes uncomfortable reading for BT. Whereas in the rest of Europe the main service provider has between 40 and 80 per cent of the market, BT can barely scrape 20 per cent market share in the UK. The report says, 'The UK market is more competitive both in terms of infrastructure competition (from cable modems) and service provider competition (BT Openworld's market share of the ADSL market is lower than Wanadoo's, T-Online's and Telia's).'

The Oftel report also points to another factor as to why Britain might be lagging in the take up of broadband. It seems that unmetered services in the UK are too cheap.

'UK prices are the cheapest out of all countries included in the study for unmetered off-peak access,' it says. As a result, in a comparison of a basket of packages for business users, 'In several countries, cable modem or DSL services appear to be the cheapest package.... In France, Germany and Sweden there are no dial-up unmetered packages. In Germany and Sweden, cable modem or DSL packages start to become cost effective at 40 hours usage per month.'

The report concludes, rather smugly, that 'UK take-up for broadband is behind that in the other countries benchmarked, although this is at least partly explained by the later launch date in the UK. However, the percentage growth in subscriber numbers in the UK was higher over the first half of 2002 than in any of the other benchmarked countries and the UK broadband market is more competitive in terms of service providers and infrastructure competition than France and Germany. These factors along with competitive broadband prices present a positive picture for broadband development in the UK.'